Key Takeaways
- • Alex Roepers, who has led Atlantic Investments for 40 years, says his core strategy of investing in undervalued mid-cap companies across the US, Europe, and Japan remains unchanged, and he has doubled down on that universe.
- • Atlantic avoids the AI trade directly and instead targets beneficiaries such as Kirby, the largest owner of inland barges in the US, which the firm first noticed at around $80 a share and which was close to $140 at the time of the interview.
- • Atlantic seeks value in spin-offs and conglomerate discounts, favoring companies that engage constructively with management and shareholders.
- • Japan is a key hunting ground, with an investable universe of over 200 companies in the $2bn to $20bn market-cap range, where Roepers credits Shinzo Abe-era government pressure on returns on equity and rising private equity involvement for pushing management toward change.
Summary
Alex Roepers, who has been at the helm of Atlantic Investments for 40 years, says the fundamentals of investing have not changed over his career. In a published interview, he argued that human emotion and recurring market trends remain constant, and that Atlantic's strategy of identifying undervalued mid-cap companies across the US, Europe, and Japan has stayed intact. The firm concentrates on mid-cap industrial products and services companies and avoids areas that are difficult to analyse or carry idiosyncratic risks that do not fit a concentrated portfolio.
Roepers has been openly skeptical of the enthusiasm around artificial intelligence. He said "the excitement is completely overrated," comparing it to the Y2K fears of 1999 to 2000. Rather than buying AI names directly, Atlantic targets the "picks and shovels" of the trade. Its example is Kirby, the largest owner of inland barges in the US, which the firm has followed for about 30 years. According to Roepers, Kirby has high inventory levels and is fully leased, positioning it to benefit from the data center buildout. He said the stock came onto the firm's radar at around $80 a share last year and was close to $140 at the time of the interview.
Spin-offs are another source of opportunity. Roepers said Atlantic looks for companies that engage constructively with management and shareholders to "accelerate value," particularly businesses assembled through acquisitions and bolt-on deals that often trade at conglomerate discounts. He added that disciplined analysis is needed to separate attractive opportunities from the rest.
Japan remains a particularly fertile region. Atlantic sees an investable universe of more than 200 companies with market capitalizations between $2bn and $20bn. Roepers attributed the country's activist-friendly environment to government initiatives led by Shinzo Abe, which for nearly two decades have pressed public companies to improve returns on equity. He also pointed to growing private equity involvement, which pressures Japanese management teams to deploy large balance sheets productively rather than pursue empire-building acquisitions.
Roepers has been openly skeptical of the enthusiasm around artificial intelligence. He said "the excitement is completely overrated," comparing it to the Y2K fears of 1999 to 2000. Rather than buying AI names directly, Atlantic targets the "picks and shovels" of the trade. Its example is Kirby, the largest owner of inland barges in the US, which the firm has followed for about 30 years. According to Roepers, Kirby has high inventory levels and is fully leased, positioning it to benefit from the data center buildout. He said the stock came onto the firm's radar at around $80 a share last year and was close to $140 at the time of the interview.
Spin-offs are another source of opportunity. Roepers said Atlantic looks for companies that engage constructively with management and shareholders to "accelerate value," particularly businesses assembled through acquisitions and bolt-on deals that often trade at conglomerate discounts. He added that disciplined analysis is needed to separate attractive opportunities from the rest.
Japan remains a particularly fertile region. Atlantic sees an investable universe of more than 200 companies with market capitalizations between $2bn and $20bn. Roepers attributed the country's activist-friendly environment to government initiatives led by Shinzo Abe, which for nearly two decades have pressed public companies to improve returns on equity. He also pointed to growing private equity involvement, which pressures Japanese management teams to deploy large balance sheets productively rather than pursue empire-building acquisitions.
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